New London officials expecting $3.6 million state reimbursement

New London - Almost 13 years after the C.B. Jennings Elementary School construction project began, the city has still not collected about $3.6 million in state grant reimbursements for the $36 million project.

But city officials said Friday they are optimistic the city will be reimbursed for the Jennings construction "in the very near term."

For about two years, the city has been working with the Capitol Region Education Council (CREC), an agency that works with and advocates for public school systems, to finally collect its reimbursement.

"Their work is completed and has been for a number of months," City Councilor Michael Passero said. "We're now waiting, essentially, to receive the reimbursement from the state. I'm optimistic we're going to get the lion's share, if not all of it."

Finance Director Jeff Smith agreed that the city expects to receive a substantial portion of the outstanding $3.6 million.

Passero, who is also chairman of the School Building and Maintenance Committee, said CREC representatives faced a monumental task when they first became involved. "When CREC came in, they had an incredible paperwork mess to sort out," he said. "They spent two years of work researching and completing these grant applications to get the money for the Jennings school project."

Passero said CREC went through boxes of old documents "in a forensic manner" to find the documentation - some of which had never been completed - that the state required.

Smith said a renewed push to collect the $3.6 million began two years ago when he, Passero, Superintendent Nicholas A. Fischer and other city employees met with the state Division of Construction Services to go over exactly what the city would need to do to be paid back.

Since then, "we've moved the ball forward," Smith said.

In total, the city has failed to collect $6.9 million in grant funding, including $5.3 million in state funding for school construction projects dating back to 2000.

The outstanding grant money, along with about $1 million in overspending on capital projects between 2007 and 2011, and the city's withering fund balance has created a serious cash flow problem for the city.

On Monday, Smith presented to the City Council's Finance Committee a solution that would involve bonding roughly $10 million to free up cash the city needs to pay its bills and meet payroll. According to Smith, New London could run out of cash in mid-May or early June if it does not act by April 25.

Passero said he is hoping the Jennings reimbursement comes before April 25, which would decrease the amount of money the city would be asked to bond. "Essentially, we've done our work. We've fulfilled our requirements and now we're waiting for the final agreement and the money to come through," Passero said. "Now the clock is ticking," he said. "I'd like to see the money come through in time so it doesn't become part of this bond package."

Passero, who said he is adamantly opposed to what he called a "reckless and irresponsible" bonding proposal, said activity in Hartford could speed up the reimbursement process. "Our legislative delegation is advocating on our behalf to facilitate whatever needs to be done to get the bureaucracy moving," he said.

Passero and Smith said there is no one individual to blame for the failure to collect the grant money; rather, the failure was the result of a systemic problem in a city that has seen a high rate of turnover in the mayor's office, the City Council, the superintendent's office and the finance department.

"Mistakes were made," Passero said. "But we've worked diligently over the last two years to correct those mistakes."

And with CREC acting as the project manager for the school building project that includes the Winthrop Elementary Magnet School and Nathan Hale Arts Magnet School, Passero said, issues that fell through the cracks during the Jennings project are properly handled on a daily, weekly and monthly basis.

"I am 150 percent confident that we have solved the systemic problems with Jennings," he said. "It was a systemic issue; that's the way we approached it, and that's the way we solved the problem."